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Some may see rainbows and pots of gold, but applicants from state and local government that are pursuing the American Recovery and Reinvestment Act (ARRA) stimulus also will find that funding approval presents its own complications, and that recovery projects require skillful management.

In this uneasy era of federal bailouts for banks, insurance companies and auto manufacturers, it seems fitting that funds also are being made available to improve services delivered to U.S. citizens at the state and local government (SLG) level. Consequently SLG organizations are rapidly responding to ensure their cut of the ARRA funds.

Developing a solid business case and completing the justification process necessary to quickly receive ARRA funding are smart ideas, especially because SLG coffers are all but tapped out. For those who delay, major projects may necessarily remain frozen that were put on hold indefinitely due to lack of funding. And costs are mounting on social programs, with no additional revenues on the horizon to cover them.

For state and local groups that are considering their options, why not apply for these federal grants? For one thing, bear in mind that the funds are not charitable gifts and there are plenty of strings attached. And if the process of competing for federal funds seemed bureaucratically cumbersome, the real job of fulfilling grant objectives will require even more discipline.

Planning and Judgment Pave the Path to Gold

Successful SLG recipients of ARRA funds are learning quickly that the significant terms and conditions require substantial effort and oversight. Still, for the majority of organizations that apply for and receive stimulus funds, the benefits far outweigh the planning commitment and potential challenges.

Even so, the consequences of success (or failure) are extraordinarily high for projects funded by the American Recovery and Reinvestment Act. Stimulus dollars will be invested with unprecedented levels of accountability and transparency, so it's important to note:

o These funds are for temporary use only.

o Availability is based upon many competing priorities.

o Spending requires significant management oversight and accountability.

Federal, state and local agencies need to be acutely aware of the substantial demands and increased scrutiny that accompany recovery funds. Each program and related project now is more visible and must meet the compliance, accountability and reporting requirements of the Recovery Act. Thoughtful planning and groundwork in advance will go a long way toward keeping deliverables on track and avoiding unnecessary issues.

Once a project is ARRA-funded, important next steps should include:

o A review of the business case with all stakeholders to ensure that the expected project outcomes can be realized in a relatively short time. It's recommended that this review include key stakeholders from the project, acquisition, finance and management departments. All assumptions, estimates and requirements need to be reset before finalizing the project plan. Remember that only a good beginning makes a good ending.

o Creation of a communication plan to ensure that the project reporting requirements described in the ARRA legislation are completely satisfied. All stakeholders should be updated periodically to make sure the project is delivering its planned value.

o Development of an acquisition strategy, which helps to determine the most appropriate type of contracting process and method of procurement. The best contracting vehicle may assign all or some of the reporting and tracking of the project's status to the successful bidder or contractor.

o Application of a disciplined project management methodology, both internally and externally.

o Creation of a comprehensive risk plan that mitigates the expectation that the resulting higher

Bill Damaré  |  Contributing Writer
Bill Damaré is regional vice president of government markets for ESI International, a provider of project management and contract management courses and training. He has more than 20 years of experience in business management, and currently leads ESI's government business. He holds a bachelor's degree in business management from the University of Maryland. For more information visit www.esi-intl.com.